As the economy falls apart and the stock market soars back toward its all time high (not there yet and perhaps it will miss the bar like a trapeze artist misjudging gravity) I’ve been thinking about speculation. It is hard to believe that investing has any place in this market where every hazard, at least for the big players and companies, is back-stopped by Daddy Fed who, in turn, is back-stopped by the relentless goodwill of everyday American working their lives away to support the follies of the financial class. Anyway, I like trying to figure out how things work and I’ve been pondering how speculation works. It seems to me that the fundamental piece is time. For investing time is not as important. The presumption is for long term gains which may come incrementally or sporadically, but will come nonetheless, provided the company is good and the price was right. This all assumes some sort of level playing field, but that’s a different question because i want to focus on speculation which cares not for a level field.

The question for speculation always seems to be time. You are betting which way the price will move and the presumption is not for long term gains, but for gains which you will pocket as you move forward looking for another opportunity. But time is always a factor. When do you think the price will move? Are you betting on a daily price move? A price move based on some other as yet unactualized event which nonetheless will still occur at a time? It is always time. It may be a moving frame of reference, subject to revision, but the speculation always occurs within a time frame. So it seems to me that before you start speculating you need to understand and specify the parameters of the time frame.